Kudayathoor Service Co-operative Bank Limited & The President, Kudayathoor Service Co-operative Bank Limited v M.G. Somasekharan Nair & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR** **WEDNESDAY, THE 1ST DAY OF FEBRUARY 2017/12TH MAGHA, 1938** **WP(C).No. 24544 of 2009 (K) ----------------------------** **PETITIONER(S): ------------1. KUDAYATHOOR SERVICE CO-OPERATIVE BANK LIMITED NO.3316, KUDAYATHOOR P.O., THODUPUZHA, REPRESENTED BY ITS SECRETARY. 2. THE PRESIDENT, KUDAYATHOOR, SERVICE CO-OPERATIVE BANK LIMITED NO.3316, KUDAYATHOOR P.O., THODUPUZHA. BY ADVS.SRI.K.K.CHANDRAN PILLAI SRI.THOMAS JAMES MUNDACKAL SRI.A.S.SAJUSH PAUL RESPONDENT(S): --------------** **1. MR.M.G.SOMASEKHARAN NAIR, MANIMALA HOUSE, KUDAYTHOOR P.O., THODUPUZHA. 2. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, (GENERAL), IDUKKI, PAINAVU P.O., IDUKKI DISTRICT.** **3. STATE OF KERALA, REPRESENTED BY ITS SECRETARY, CO-OPERATION (C) DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-1.** **R1 BY ADV. SRI.MATHEW PHILIP EDAPPALLIL R2-3 BY ADV. SPL.GOVERNMENT PLEADER SRI. SANTHOSH KUMAR** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINAL HEARD ON 01-02-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **EL** ## **WP(C).No. 24544 of 2009 (K)** ## **----------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** ## **-----------------------** - **P1 TRUE COPY OF MEMO OF CHARGES DATED 27.03.2002 ISSUED TO THE 1ST RESPONDENT** - **P2 TRUE COPY OF REPLY DATED 1.4.2002 TO EXT P1 SUBMITTED BY THE 1ST RESPONDENT** - **P3 TRUE COPY OF ENQUIRY REPORT DATED 4.9.2002** - **P4 TRUE COPY OF SHOW CAUSE NOTICE DATED 18.10.2002 ISSUED TO THE 1ST RESPONDENT** - **P5 TRUE COPY OF REPLY TO EXT.P4 SUBMITTED BY THE 1ST RESPONDENT DATED 29.10.2002** - **P6 TRUE COPY OF ORDER DATED 14.1.2002 ISSUED TO THE 1ST RESPONDENT** - **P7 TRUE COPY OF APPEAL DATED 15.02.2003 SUBMITTED BY THE 1ST RESPONDENT BEFORE THE BOARD OF DIRECTORS OF THE 1ST PETITIONER** - **P8 TRUE COPY OF APPELLATE DECISION OF THE BOARD OF DIRECTORS DATED 23.4.2003** - **P9 TRUE COPY OF ORDER DATED 21.07.2004 PASSED BY THE 2ND RESPONDENT** - **P10 TRUE COPY OF APPEAL SUBMITTED BEFORE THE 3RD RESPONDENT BY THE 1ST PETITIONER DATED 15.10.2004** - **P11 TRUE COPY OF ORDER DATED 6.10.2004 PASSED BY THE 3RD RESPONDENT** - **P12 TRUE COPY OF ORDER PASSED BY THE 3RD RESPONDENT DATED 17.07.2009** - **P13 TRUE COPY OF A DECISION DATED 21.08.1997 TAKEN BY THE DISCIPLINE COMMITTEE** - **P14 TRUE COPY OF CHARGE MEMO ISSUED TO THE 1ST RESPONDENT DATED 27.12.1996** - **P15 TRUE COPY OF DEPOSITION OF MW-1 DATED 18.07.2002 IN THE ENQUIRY PROCEEDINGS** - **P16 TRUE COPY OF EXT. D-1 DATED 22.12.2001 IN THE ENQUIRY PROCEEDINGS** **RESPONDENT(S)' EXHIBITS** - **-----------------------** - **R1(A) TRUE COPY OF LETTER NUMBER ST.1360/10 DATED 17.03.2010 FROM THE OFFICE OF JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, ERNAKULAM** - **R1(B) TRUE COPY OF ADVERTISEMENT FOR THE POST OF TWO SALESMAN PUBLISHED IN MATHRUBHOOMI DAILY DATED 13.07.2013** **NIL** **TRUE COPY** **P.S. TO JUDGE** **EL** ## **P.B. SURESH KUMAR, J.** ## **-----------------------------------------------** **W.P.(C) No.24544 of 2009 ----------------------------------------------Dated this the 1[st] day of February, 2017** ## **JUDGMENT** Ext.P9 order of the second respondent and Ext.P12 order of the Government confirming Ext.P9 order, are under challenge in this writ petition. The facts relevant are the following: The first respondent was a Salesman in the store run by the first petitioner, a co-operative society registered under the Kerala Co-operative Societies Act. Ext.P1 is the memo of charges issued by the society to the first respondent in the disciplinary proceedings initiated against him. The charges levelled against the first respondent in the memo of charges, in essence, were that the first W.P.(C) No.24544 of 2009 -2- respondent had sold stocks in the store worth Rs.27,125/without raising bills and misappropriated the proceeds thereof and that the first respondent, who was authorised to sell the old stock manure at half price, had sold new stock manure at half price and misappropriated the differential price. Since the first respondent denied the charges, a domestic enquiry was conducted. Ext.P3 is the report of the domestic enquiry. In Ext.P3, the enquiry officer found that the charges levelled against the first respondent have been established. Consequently, the President of the society passed Ext.P6 order by which the first respondent was dismissed from service. Ext.P6 order was challenged by the first respondent in appeal before the managing committee of the society. The managing committee of the society confirmed Ext.P6 order by Ext.P8 decision. Being aggrieved by Ext.P8 decision, the first respondent preferred a representation before the W.P.(C) No.24544 of 2009 -3- concerned Joint Registrar of cooperative societies and the Joint Registrar rescinded Ext.P8 decision invoking his power under Rule 176 of the Kerala Co-operative Society Rules. Ext.P9 is the order passed by the Joint Registrar in this connection. The society challenged Ext.P9 order before the Government in an appeal preferred under Section 83 (1)(j) of the Act. By Ext.P12 order, the Government confirmed Ext.P9 order. The society is aggrieved by Exts.P9 and P12 orders and hence this writ petition challenging the said orders. The first petitioner is the society and the second petitioner is its President. 2. Heard the learned Senior Counsel for the petitioners as also the learned counsel for the first respondent. 3. The learned Senior Counsel for the petitioners, relying on the Larger Bench decision of this Court in **Chirayinkeezhu Service Co-operative Bank Ltd.** W.P.(C) No.24544 of 2009 -4- v. **Santhosh** [2015(4) KLT 163], contended that Ext.P9 order is one passed without jurisdiction. On merits, the learned Senior Counsel contended that the dismissal of the first respondent was in accordance with law and there was absolutely no reason for the Joint Registrar to interfere with the said decision of the society. Per contra, the learned counsel for the first respondent contended that the dismissal of the first respondent was per se illegal. 4. In **Chirayinkeezhu Service Co-operative Bank Ltd.** (supra), a Larger Bench of this Court held that service disputes of employees of co-operative societies are matters contemplated by the statute to be resolved by recourse to Section 69 of the Kerala Co-operative Societies Act. In other words, the view taken by the Larger Bench was that the power of the Registrar under Rule 176 of the Kerala Co-operative Societies Rules cannot be invoked for resolving service disputes of the instant nature. In the W.P.(C) No.24544 of 2009 -5- light of the said decision, the case of the petitioners that Ext.P9 order is one passed without jurisdiction is only to be accepted. 5. That apart, the first respondent admits the charge of shortage of stocks in the store. As regards shortage, the explanation of the first respondent was that he has sold the stocks on credit basis with the consent of the member of the managing committee of the society who was in charge of the store and that therefore there is no misappropriation. As regards the sale of new stock manure at half price, the materials indicate that the explanation offered by the first respondent was that he had only sold old stock manure at half price and the new stock manure was found short as he had to replace the old stock with new stock on account of the threat of the persons who have purchased the manure. Ext.P9 order indicates that Ext.P8 decision of the society was interfered with by the W.P.(C) No.24544 of 2009 -6- Joint Registrar mainly on three grounds; (1) that the President of the society who passed Ext.P6 order had participated in the managing committee of the society which dismissed the appeal preferred by the first respondent against Ext.P6 order, (2) that the first respondent had sold the stocks in the store on credit basis as permitted by the member the managing committee of the society who was in charge of the store and (3) that the penalty of dismissal from service imposed on the first respondent is grossly disproportionate to the misconduct established against him. The learned counsel for the first respondent has reiterated the said grounds to support Ext.P9 order passed by the Joint Registrar. 6. It is seen from the proceedings of the managing committee, in which Ext.P8 decision was taken, that when the appeal preferred by the first respondent challenging Ext.P6 order was taken up for decision, the W.P.(C) No.24544 of 2009 -7- president of the society went out of the venue of the meeting so as to enable the remaining members of the managing committee to take an independent decision in the matter. The relevant recital in the said proceedings of the managing committee reads thus: **“** ÌÞCßæÜ æØÏßWØíÎÞÈÞÏßøáK dÖà. **M.G.** çØÞÎçÖ¶øX ÈÞÏV ¿ßÏÞæÈ ØVÕîàØßW ÈßKí ÁßØíÎßØí æºÏñá æµÞIáU ÌÞCí dÉØßÁaßæa ©JøÕßæÈÄßæø ØÎVMßºî ¥MàW ÄàøáÎÞÈJßÈÞÏß ®¿áJá.ådÉØßÁaí µNßxß ÙÞ {ßW ÈßKá ÉáùJá çÉÞÏß. **”** The contention raised by the first respondent as regards the participation of the President of the society in the meeting of the committee in which the appeal preferred by the first respondent was considered, therefore, fails. The contention that the stocks in the store were sold on credit basis with the permission of the member the managing committee of the society in charge of the store is a W.P.(C) No.24544 of 2009 -8- contention that should have been established by the first respondent in the domestic enquiry. The report of the domestic enquiry indicates that the first respondent has neither cross examined the witnesses of the management to establish the said fact nor did he adduce independent evidence for the same. The said contention also therefore fails. As regards the contention that the penalty imposed on the first respondent is grossly disproportionate to the gravity of the misconduct established against him, it has to be noted that the case on hand is one of misappropriation. Ext.P13 order indicates that the first respondent had indulged in activities of similar nature on earlier occasions also. In the circumstances, it cannot be said that the dismissal of a person on the ground of misappropriation, who had earlier antecedents of misappropriation, is disproportionate to the established charge of misappropriation. W.P.(C) No.24544 of 2009 -9- In the circumstances, the writ petition is allowed, the impugned orders are set aside and Ext.P6 order and P8 decision are restored. Sd/- **P.B. SURESH KUMAR, JUDGE.** bpr